World Bank approves $200 million loan to support sanitation in Egypt's rural areas

Ahram Online, Friday 1 Jul 2011

The World Bank pumps a new loan into the Egyptian economy to provide people in four rural areas with improved sanitation and sewerage

Millions of Egyptians suffer from water shortages on a daily basis (Photo: Reuters/Amr Abdallah)

Yesterday the World Bank approved a US$ 200 million loan to support Egypt’s Second Integrated Sanitation and Sewerage Infrastructure Project in four governorates: two in the Delta Region and two in Upper Egypt.

The main objective is to provide some 1.2 million people in the governorates of Menoufia, Sharkeya, Assiut and Sohag with better access to sanitation and sewerage services through the construction of a wastewater infrastructure systems in 19 village clusters.

The project is to be implemented jointly by the National Organisation for Potable Water and Sanitary Drainage, the Holding Company for Water and Waste Water and its four subsidiaries.

"There is a significant gap between the sanitation services available to urban Egyptians and their rural fellow citizens," the WB said in a press release today. “Just a limited percentage of villages across Egypt have access to safe disposal of waste water, much of which is discharged untreated into agricultural drains and canals causing pollution which seriously threatens public health and the environment.”

The proposed project is totally consistent with the government’s priorities of increasing rural sanitation coverage and accelerating development in Upper Egypt, as well as the World Bank Country Assistance Strategy goals of reducing disparities between Upper and Lower Egypt, enhancing the provision of public goods through expanded supply and improved efficiency, and strengthening the accountability of public sector agencies such as those in the water and sanitation sector.

The World Bank has been supporting the sector since 2008 with the first US$ 120 million loan to support the Integrated Sanitation and Sewerage Infrastructure Project (ISSIP1) in the three Delta governorates of Beheira, Gharbeya and Kafr El Sheikh.

Under Phase 1 of the project, two wastewater treatment plants are being built in Gharbeya and Kafr El Sheikh, while five collection network sub-projects are to be implemented in Gharbeya Governorate. 

There are also ten collection network sub-projects in Beheira and, once construction is complete, they will be connected to the government-financed Lidia wastewater treatment plant.

The new ISSIP2 project builds on the lessons and experiences of ISSIP1 and further expands the scope of sanitation coverage to less developed areas of Upper Egypt.

Egypt announced last week it will not borrow from the World Bank and International Monetary Fund after revising its budget and cutting the forecast deficit, even though a loan had been agreed.

In June, the Minister of Finance announced on a $2.2bn World Bank loan at an interest rate of 3 per cent to be repaid over 18 years, after he reportedly requested up to $6.2bn in soft loans from the IMF and the WB.

The news brought mixed reactions from economic commentators, many of who agree with Radwan on the necessity of further loans but worry about adding to Egypt's escalating foreign debt.

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